Purpose Target: Productivity (2007-2016)

To rank in the top quartile for productivity against our key trading partners in the OECD by 2017

Current Status Scotland’s productivity performance relative to the lowest ranked country in the top quartile of OECD countries has been maintained in 2014.

Since the baseline position of 2006, the gap in productivity performance between Scotland and the closest ranked country in the top quartile is broadly unchanged, from 23.8% to 23.5% in 2014, but has varied from year to year.

Changes in productivity during this period reflect variations in the adjustment in GDP and employment across countries as a result of the global downturn and differences in the timing and nature of the recovery phase.

Productivity is a measure of how well an economy uses resources to produce output and is a fundamental determinant of international competitiveness and living standards.

Productivity is generally measured as the amount of output (goods and services) produced in an economy adjusted for the amount of labour (i.e. the number of workers or hours worked) used to produce that level of output. However, the Government Economic Strategy also emphasises that a focus on resource efficiency will help ensure that the Scottish economy remains competitive in globally challenging times, and provide opportunities for a new source of long-term competitive advantage.

Over the long-term, improvements in productivity performance will increase the competitiveness of an economy and make the largest contribution to increases in overall economic growth rates. Improving Scotland's productivity performance is therefore central to the Government Economic Strategy.

The evaluation is based on the change in the gap between productivity levels in Scotland and the lowest ranked country in the top quartile (rank 8th). The latest data show that Denmark has been the lowest ranked country in the top quartile in 2013 and 2014. In 2014 Scotland was ranked 19th (out of 32 countries) for productivity levels amongst OECD countries, placing Scotland near the top of the third quartile.

In 2013, Scottish productivity levels were 75.7% of levels in Denmark – a gap of 24.3%. In 2014, productivity levels in Scotland were 76.5% of levels in Denmark – a gap of 23.5%. Between 2013 and 2014 the gap between productivity levels in Scotland and the lowest ranked country in the top quartile decreased by 0.8 percentage points when rounded to one decimal place.

The OECD data bank now includes information on new accession countries Chile, Estonia and Israel. These countries have not been included in the analysis to allow like-for-like reporting over the life of this indicator.

This evaluation is based on: any difference in the gap within +/- 1 percentage points of last year's figure suggests that the position is more likely to be maintaining than showing any change. A decrease in the gap of 1 percentage point or more suggests that the position is improving; whereas an increase in the gap of 1 percentage point or more suggests the position is worsening. The change in levels are calculated using unrounded numbers, but are only presented to 1 decimal place.